Student loan debt has become a major problem in the United States in recent years. Many college graduates leave school with more than $20,000 in debt. In some cases, this leads them to dip into their emergency funds to help make payments. It can also prevent them from creating one altogether. Paying off this debt faster than normal is a good way to keep the amount of interest accrued down.
Make Payments While In School
Although it may not be possible for everyone, making payments while in school can help you pay down your debt faster, according to Wise Bread. Even though you aren’t required to make payments, interest is still accrued. Making payments while still studying can help reduce the amount of interest that you take on. However, there may be prepayment penalties on some of your loans. It is important to check with your lender to make sure you won’t be charged any fees.
Consolidate Your Loans
Another way to help pay your student debt faster is to consolidate your loans. This lumps all your loans into one so making your monthly payments is much more convenient. This may be smart if your credit has improved from the time your first took out your loans. If it has, you may qualify for a better interest rate, which would lower your payment.
However, it is advised against consolidating federal and private loans. Doing so could lead to the loss of some of the benefits federal loans provide near me, such as income-based repayment.
Enroll In Auto-Debit
Having your payment automatically deducted from your bank account may be beneficial. This ensures that you make the payment each month. Some lenders may also offer a small discount each month if you choose auto-debit.
Make Bi-Weekly Payments
If possible, making bi-weekly payments instead of monthly ones can help pay debt faster, according to Investopedia. This method is often used for mortgages. It can potentially help reduce your repayment period by a number of years. Instead of making 12 payments a year, you’d be making 26. This allows less time for interest to accrue. With less interest, the overall cost of your loans will be less. However, if you receive a discount for monthly automatic debit you may not want to make bi-weekly payments.